tv First Up With Angie Lau Bloomberg August 27, 2015 7:00pm-8:01pm EDT
angie: the rally rules on. he was stocks enjoyed their biggest two-day gain since 2008. in sixped the most years. even so, wait until december. it is said the fed will put the long-awaited rate rise on hold. and sources say beijing has stepped back into the market and is dumping treasuries to support. welcome to "firstup." coming to you live in hong kong
and streaming on your mobile, the global relief rally has rolled on through new york. u.s. stocks surged to their biggest two-day gain in more than six years will stuff stronger than expected gdp data also provided a lift. the dow has seen its biggest gain since 2008. when you managed to climb out, it gives you the ability to focus again on what is important. one of the first things the gdps focused on was number stronger than any estimate from the economist survey for burke. what we saw first in the market was very impressive numbers, 2% gains across the board. we have the dow up 369 point on top of yesterday's 619.
both the s&p 500 and nasdaq up 2.5%. gross domestic product rose at a 3.7% rate. better than forecasted and then some because it was up on the 2.3% gain reported last month. bigger gains in consumer and business spending shows that u.s. expansion is getting back on track. that is a positive. later on, a separate report showing job benefits fell to a -- applications to benefits without a three-year low. and public in four homes climbing in july. -- the application or homes climbing in july. a lot of the central bank leaders heading to picturesque wyoming for the economic symposium hosted by the fed bank and the fed bank president known
as a hot favoring rate hikes and you have a lot of people asking that question -- what is the fed going to do? signaledk they have that every meeting is going to be a live auction and i think in between meetings, we are always judging what shifts have occurred that would change our forecast. at this point, i have not been something -- seen something that would change my own sense of how the economy is doing. >> classic answer from a fed president. just saying they have not changed, i have not changed. the fed president is a hot in in thisario. -- a hawk scenario. a 30% chance of a rate hike in december, much higher than the turmoil.
mohammed is now saying they will probably push anything back to december. you will hear more on that. the main view is that the focus has returned to the economy for the end there is somewhat of a restored confidence as the economy appears to be in good shape at the moment. back to you. that is what the data is telling us. to buy so much for that. here in hong kong, let's check in on markets. to new zealand where we see the extension of the gains we have seen in the past couple days. -- counting down to the opens in australia, japan, and korea. in japan yesterday, it was jumping for a second day. more than 1% higher. we have nikkei futures above the 19,000 mark. the dollar yen right now is that the 121 mark.
oil has a jumped the most in more than x years after better than it acted second-quarter gdp results from the u.s.. let's bring in dan from houston. some believe for producers. dan: the gdp boost is just what they needed, the biggest jump in oil prices in the past six years. thatneed to see some signs oil demand is going to grow to meet the supply glut we have. seeing the economy running on all cylinders is enough indication that might happen. angie: our analysts more bullish now on oil prices? dan: not all of them are. not bee said he would surprised if he saw oil fall under 30 by the end of the year. glut we had --
producers need to see oil below 30 in order for them to shut the wells off. fund manager has been calling this big decline we have had for the past year -- he said he still expects to see prices drop. a lot of the strength we have seen in prices is due to china buying oil to fill up their strategic petroleum reserve. because it's stealing the future demand to create current demand. as soon as the stock filling stops, we see weaker demand and it will need production to fall off that much further to rebalance the market. angie: a good point, especially at prices right now. it is a bargain for future demand from china all-star what -- china. what is the impact of this low oil price on energy companies? dan: energy companies are using this as an excuse to grow. mergers and acquisitions have blown up over the last 12
months. three of the last four quarters, we have seen the biggest energy mergers and acquisitions going back decades. we had a $260 billion mergers and acquisitions of the second quarter and we just a big $14 billion deal early this week. angie: all right. you are going to leave it there. thank you so much for that. out of houston for us. the chinese slowdown has been reflected in the results of two banking giants. loans, 25ease in bad billion dollars. the jump in bad debt was more than double than last year. the average bank of china site 20% jump in that loans. banks reported zero profit growth in part due to a doubling of provisions. we will keep an eye on china.
this search came after profits millionevenfold to $654 in the first half, about 10% more than forecast. air china benefiting from cheap you'll but expects more bobby ryan's in the second half due to -- expects more bumpy rides in the second half. and tiffany shares fell more than 2% after it missed earnings estimates. the strong dollar is hurting oversea sales, making up the bulk of tiffany revenue. expects 2016 earnings to be 2.2-5 percent lower. is pulling out all the stops to ensure nothing detracts from next week's grand military parade in beijing. it is employing all weapons in its armory, including confidence
boosting measures. stephen engle will be in beijing for the parade but right now he's in our studio and it is funny we're talking about the arsenal. forget the tanks, the weapons. the real weapons here are fiscal policy. >> this is my black friday outfit here wil. the government is going to step in like they did yesterday. let's bring it up on the full-screen. they have not come out and said we are intervening but it is clear. it didn't into negative territory right here -- it dipped into negative territory. we are from sources saying the government came in and darted buying blue-chip -- and started buying blue chips. all these big blue chips in
china have such a similar chart, they spike up at 5%. the government was coming in. it is counterintuitive. they both cannot look disappointing earnings and yet -- they traveled like this for most of the day and spiked up. >> is the new floor the government is seeing. they're trying to accomplish that. they decided that is the time to get in. angie: more rhetoric from the state media blending the global stock route on the west. >> let me just read you -- this is typical from the state mouthpiece blaming the west. puppy to create fraud. -- helping to create froth. this ariseary says
from western countries, not china. partt to add in the first of my answer here, there is an expansion of the program for local government finances. this ahead of the parade, boosting confidence and helping the local governments pay off their debts. this will be the first step, the first increase in march. in june was the second expansion aboutw the third, up to $500 billion. there are also relaxing property purchases for foreigners. angie: that is a big move. >> symbolic but not significant. it has been very restrictive for long time, which discourage a lot of afford investors. ahead of that big parade. thank you. buying a 20% stake in commodity trader along for
for -- a commodity trader $1 billion. sector set of competence short seller muddy waters question the company's finances. if you are curious about it, coming up in about 20 minutes, we are going to be joined the olam ceo.y stay for that. relief rally'll be in the u.s. help boost the stocks in asia> ?we take a closer look when first up returns . ♪
europe taken another tragic turn with as many as the bodies -- with the bodies of 50 people found in the back of a truck. there was no one alive inside. the truck is thought to be carrying false plates and it is not known where it started its journey. police say the victim's may have been dead for at least 1.5 days. fora has sent the army violin clashes have left nine people dead. .onflict flared mobile phone to medications were cut in the city. forces.acked security a general strike has been called into supported demand for special studies of the group, including government jobs and guaranteed places in school. smog levels in beijing at a record low ahead of the military poll that military parade, marking the end of world war ii.
below is a five day reading since records were released. world leaders are expected for the september 3 event. president obama will not be among them. .et's get back to the markets the dollar is back up on the backs of better-than-expected u.s. gdp data. also helping bolster oil, seeing its biggest gain since 2009. dow jones had its biggest two-day gain since 2008 and the s&p 500 finishing 2.4%. the biggest two-day gain since the market began six years ago. michaelt more from joining us from san francisco. yet another day of up and down ending the day higher.
what did you make of it? question here big is whether this is the start of a different type of market or just a correction in a longer-term bull market. since we are in it, it is tough to say. we definitely saw a great breath the last couple days. we saw strength across the board, especially energy and natural resources. tohink it was largely due the more than expected robust gdp number for the second quarter. it remains to be seen. we're still growing at 2.5% and the number was better than expected. is the big selloff over then? over? correction phase >> that>> is a big questioned and you can make a case either way. off the ball case, the u.s. does have economic growth. curve,e a positive yield
technological innovation, employment -- unemployment low. those are reasons it could continue. corporate earnings remain strong. on the negative side, we have had our correction now. the question is whether there is another downside lag, on the negative, is this sustainable? will leave us go into recession? for strength of the dollar hurt the u.s. economy? what about the impact on slowing economic growth on the u.s.? i would tend to favor the former case. the u.s. can continue to grow in the current conditions we have but there is another case out there. angie: ok. jacksonly in light of hole coming up this weekend and what we will get any indications of when we could see a fed rate hike, what are you doing with your money? environment like this,
it depends on what kind of investor you are. in equities, the time to buy was a few days ago. seeing these runs, wait and see what happens. if you are a bond investor, we are recommending shorter durations of higher relative there is respect interest rates. for those it all nowhere to turn, investors have been going to cash. you can do better in cash using a diversified portfolio on a number of different asset classes, including stocks and bonds, precious metals. some of those areas that have been beaten down. you want to buy low and some of those areas like we saw in today's market presents a very good long-term opportunities if you have the strong stomach for that. toh respect to the set, answer your question, you can make a case either way. will not doink they anything right now. they will wait and let the dust settle on september, especially with global pressure.
standpoint, they're not going to move that aggressively regardless of what they do. i would like to see them get on with it right now. this rate has gone on way too long. it is just holding us back and create uncertainty. angie: absolutely. but forget another crisis. what is it going to do when the arsenal pretty much to pleaded -- depleted? thank you so much. lots more coming up on "firstup ." this morning -- is the impactit of the slowing chinese economy. ♪
angie: what of the world's biggest distiller says the recent improvement in spirit market will not last. the market continues to fall let a high single-digit pace. the profits mixed expectations -- missed expectations of the first half. the company's president spoke lucidly -- exclusively. >> it is something we are kind of used to.
we have seen the bombings, very is disruptions in china over the years. indonesia is being disrupted. volatility is something we're used to. this center of ours is to respond to that volatility for more quickly. we have a technical c enter. we can develop new products, new innovations coming from the inside on the products -- from the sentiment on the products. >> that is impacting business or you -- for you. >> we have had an impact on super deluxe businesses in china. in some instances, categories have in down by 50%. traditional long trade business down.
that was our first shock. >> and delighted with what the fund is giving us and ultimately it's recent performance. we have seen quite a significant turnaround. of thea accounts for 1% total revenue. the target is 5%. how and when will you get there? the time from is important. >> china has various roads we need to travel so it is a medium to longer term goal. what is a medium to longer term? give us a number. >> medium to longer term. [laughter] 5-10 years. we will continue to invest in the short-term.
and through our luxury riserva portfolio. we will continue invest in johnny walker hauser and we know that longer-term, all of those will pay back and deliver the 5% expectation. >> indonesia -- very challenging to be operating in a market so nationalistic that has imposed limitations. hurt do a large extent or have you managed to minimize the damage? a large extent or have you managed to minimize the damage? >> we are recovering from that now. we have launched guinness zero. we very much welcome the change in cabinets because we hope that will give us a dialogue to allow us to address some of the issues
they see in their markets in relation to the consumption of alcohol. we welcome that opportunity because we have joint interests in seeing our products consumed responsibly in the market. indonesia for us, still is significant opportunity. we still investing come innovating, developing ready to drink products. evolving our guinness operation and developing mainstream spirit opportunities. coming up next, japan's to ans rate according analyst study by bloomberg. and we will bring you the numbers as they cross the numbers as they cross the bloomberg terminal whe
angie: it is 7:30 in hong kong. it will be a bit of a rainy day. we are ending a choppy trading week in asia. in the open of trading in australia, japan, and south korea, we are just 30 minutes away. you are watching "firstup." ♪ u.s. stocks posted their biggest two-day surge in six years as the economy grew more strongly
than expected. gdp rose by 3.7% last quarter, beating the estimates of all economists we surveyed. the jump is put down to hire business and consumer spending. the news comes as the fed is deciding if the economy is strong enough to face the first rate increase since 2006. oil caught up in u.s. growth. west texas futures rose more than 2%, the biggest gain since 2009. prices are down with pretty percent from this year's closing of a longpectations streak. beijing taking measures to ease the pressure on local government borrowing, raising the debt quarter to $500 billion. china has also loosen restrictions on foreign investment in real estate to boost the ailing property market.
breaking news from japan. the latest consumer prices are crossing the bloomberg terminals. sherry: consumer prices in japan coming in line with estimates. in july, a rising to tens of 2/10 of a percent. also core prices, excluding fresh food, stayed flat. that is above estimates. economists were expecting it to fall into negative territory. still slowing down. /10 of a percent. if you scrape out the cost of energy, prices did a little better. a percentd 6/10 of come in line with estimates. also the same as the previous month. remember energy prices have been a huge downward pressure on prices there.
gauge stilllation remaining flat. and we also have job numbers out of japan. as we see right now, the jobless rate coming in at 3.3%, below analyst estimates and below the june figure. 1.21.applicant ratio of that means there were 121 positions available for everyone hundred job seekers. is a still not really helping people go out and start spending. household spending again disappointing, falling 2/10 of a percent. we are expecting it to rise .5%. they are against falling in
july. back to you. angie: watching that household spending very carefully there. thank you, . checking in on the markets in asia, right now to new zealand, we see gains higher. with the new zealand dollar spot gaining. we are also counting down to the opens in australia, japan, and korea. seconday, japan had the day of gains. let's see what the third day will bring. final trading day of the week. futures in chicago saying they will start above the 19,000 mark. out will also help exporters. time for a look at some of the top corporate stories. here is david. talk about facebook first. if you are the social network,
you are one in one billion. show figures different from the numbers facebook disclosed. those are the average number of daily users. had 168 million active accounts in june. overall, 1.5 billion users who log in at least once a month. said the new demands are peculiar. google has rejected the eu accusations and says it has provided evidence that shows the contrary. the eu said it will consider google's response. fans will be counting down to september 9. that is when the latest iphone the releaseto
in san francisco. invitations have come out for an event that may include an update for apple tv. the event will also allow tim cook to address concerns. that was a look at the top corporate headlines this hour. angie: the sprawling japanese conglomerate mitsubishi has agreed to buy a 20% stake in commodity trader alum olamnational -- international. yesterday before trading halted. joining us now is the cofounder and ceo. this deal has been in the works for how long and why? as is the nature of all of these deals, it takes a while before you can do something. we have had a very long
relationship with mitsubishi. this is just a continuation of that relationship we have had. we ran a process with multiple parties interested in aligning with olam. after that process, we settled on mitsubishi as being our long-term strategic partner. ngie: what does this mean for olam? what kind of savings and benefits will this provide to olam? >> it provides growth capital. so when it will percent stake and issuing new shares to mitsubishi, we are raising on hundred $15 million worth of --itional growth capital $915 million worth of additional growth capital. createeve this will
opportunities in line with our strategies. that is the first advantage. the second is that we believe with the mitsubishi footprint in japan and the proposed market we would be entering for the exclusive distribution of olam products would allow us to gain increased market share an important market. regions in specific where we have complementary strengths, for example in africa where mitsubishi is trying to increase its footprint. in some sense the goto company in africa given our experience in those markets across various platforms. we will be hoping to work with mitsubishi to increase our combined strength. indonesia, mitsubishi is
ining a significant push food products and distribution. we have a role to play in providing a supply chain solutions and ingredients they will be requiring. that is another corporation we will be examining. we're setting up a partnership to explore these areas where we can collaborate to increase the combined value of both franchises. angie: here's the thing though, feeding the world is such an important race for so many companies. for you, you are already top in rice and cocoa. are we going to see more consolidation in this industry with mitsubishi buying a 20% stake/ ?they buy a could they buy a bigger stake?
think companies will look to see how they can combine the market positions. i think that trend continues to remain intact. mitsubishi's future plans is better addressed to them but we welcome you to be she as a partner. -- welcome mitsubishi as a partner. i think with these groups of shareholders, we have changed our shareholder files. in terms of having long-term shareholders, which is .onsistent with a strategy angie: does this also help you combat those obligations from muddy waters that you have exerted some confidence in your company now with the mitsubishi
stake? how are you addressing those concerns that might be out there still? know, we have recalibrated our strategy, realigned our shareholder base. this investment by mitsubishi is a further reaffirmation of the value that people see in the o lam franchise. we have built a differentiated, unique business, and one with significant growth prospect because people are beginning to recognize we have the capacity. this transaction today we shownced and the interest is a reflection of that. go, havefore i let you
to quickly ask, does commodity rep we have seen, how is that impacting your business? are you having problems with liquidity? grouphink the commodity is largely driven by a couple factors. much more and industrial raw materials. space, demandture is fairly sticky and mostly efficient resistant. but the reason agriculture commodity prices are off is because of the strength of the u.s. dollar and the weakness of emerging-market currencies. in argentina and mexico, similarly. the devaluation of the local currency is one of the reasons why the commodity prices are soft. angie: we're going to leave it there. it is such a pleasure talking with you and he was so much for
try not to 1024 people -- china has detained 24 people. the port is a gateway to northern china. a chemical company whose warehouses blew up had help to pass safety tests, giving it a license to handle dangerous materials. india reviving plans to look for oil off the coast of vietnam. aurces told bloomberg that
natural gas corporation will also ownss in an area by china. the foreign ministry warned against illegal actions. china says it owns 80% of waterways. outneers are trying to work what caused a section of pavement to collapse in this tiny city. four people suffered minor injuries. the entire event was captured on a security camera. one woman managed to cling to when exposed pipe lob pass is by pulled other people to safety. let's return to japan. numbers in latest jobs. did you like the numbers coming out of japan today? opi coming in at zer percent. >> it is better than expected.
years --e than three why?: a the so-called three arose -- arrows. there was a stimulus but that is gone. the structure reform, there has been really no structure reform at all. and then with popularity starting to decline, i don't think the prime minister can tackle any hard challenges in the rest of his tenure. angie: what hasn't helped is this global drought wiped $5 trillion off of value for investors, e has said that what is happened over the past couple weeks makes it harder to achieve that 2% inflation gold. is -- goal.
is he right to blame global conditions? >> i don't think so. he did actually have help in 2013 and 2014. surged.al stock market i don't think he can now blame why it is not working on the global phenomenon. they still sound pretty optimistic they can get to that 2% inflation goal and even said to world out stimulus from the table. is he doing the right thing? is he right? think there is a thing -- full the once, shame on
you, for me twice, shame on me. next year, you will break the promise again. angie: what is the owl like for the yen -- outlook for the yen? >> the ultimate risk for japan is a currency crisis. title think the prime minister has done -- i don't think the prime minister has done anything to reduce the risk. ishink the medium-term negative. the yen should decline. angie: one last question. do you think that next month, cpi figures will are fled what is a very worrying right now, a
lack of household spending? >> yes, indeed. growthad a negative gdp in april and june without any major domestic issues. the number we saw today is slightly better and it does show maybe japan had a good summer. in the long-term, the long-term outlook is still quite bleak for japan. i don't think there is a chance the boj can achieve the targets. angie: we believe it there. news fromre breaking japan. household spending was disappointing. does that relate to the latest retail sales data coming across the bloomberg terminal right now? shery ahn has all the numbers. shery ahn: retail sales beating estimates, rising 1.6% in july, beating economists estimates.
and accelerating from june. analysts say pay more attention to core household spending because that has done a better job lately in forecasting the economy and the moves of the government. we will see how this translates into the bigger picture of the japanese economy. retail sales beating estimates. back to you. angie: thank you. coming up next, 22 rounds of stocks. no agreement inside. find out how industrial action may put a dent in hyundai's bottom line. that is the next. ♪
been brought down to earth. over by acked photographer on a segway. he jumped out and went to check if the cameraman was ok. it was his 10th gold overall. he later dismissed the incident as just one of those things. you can say that about this week . just one of those things. at thea look at ahead opens in japan, australia, and korea. has aknow south korea significant labor movement and the labor unions are big. cap hundreds of thousands of workers.
the labor union has locked out of the preliminary talks. they could authorize a strike next month. angie: another strike for hyundai. of anotherpect strike. hundreds of thousands of workers. when these strikes get going, we're talking about barricades, cars of said on fire. -- set on fire. the stock is up just about 10% in two months. it has had a bad year, down 35%. >> i'm looking at an australian law firm. angie: i object. sustained. sorry. a for your net 4-year net profit.
earlier in the year and has been under pressure for the security regulator, asking to change the way it does its accounting. at 5.5 australian cents. angie: jury is out. david. >> overruled. >> that is out of order. >> uranium. the story is fairly simple. -- they expecting reported three or four times bigger. simply because it had to book a huge impairment charge. stocks not really doing very well. angie: you say. >> i think it is nice david is
♪ mark: renminb i'm mark halperin. aljohn: i'm john heilemann. due respect you are not the only one who knows how to escalate a situation. ♪ al: today -- john: today we are the first reporters to get a two or from the campaign headquarters in this building. first, our guest joins us right now. the man of the hour, and the man of the tower